John Warrillow - The Art of Selling Your Business: Winning Strategies & Secret Hacks for Exiting on Top

If selling our business was like climbing Mount Everest, then The Art of Selling Your Business: Winning Strategies & Secret Hacks for Exiting on Top is like the ultimate sherpa to get you to the top.

Damien James, Founder

SOLD DIMPLE FOR $13.4 MILLION

Jam-packed with negotiation secrets. Should be required reading for anyone considering selling their business.

Dan Martell, Founder

THREE SUCCESSFUL EXITS

In The Art of Selling Your Business, John shares incisive, practical advice on how to best develop companies for this high-value milestone. A compelling read!

Aurangzeb Khan, Founder

SOLD ALTIA SYSTEMS TO JABRA GN FOR $125 MILLION

During a negotiation to monetize all that work youve done to build your business, you can lose years of equity value in minutes if you are not prepared. The Art of Selling Your Business is a must-read (and apply) now to ensure full value for your business.

Michael Houlihan, Co-Founder and NYT

best-selling author, The Barefoot Spirit

SOLD BAREFOOT WINES TO EJ GALLO

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Im not a lawyer. Nor am I an accountant, a financial advisor, or a mergers and acquisitions (M&A) professional. Therefore, please treat the opinions here as just that: opinions. They are not, and should not be treated as, professional advice. Selling your business is not a do-it-yourself project. You should have your own team of experts advising you on the most important transaction of your life. Hire the best you can afford. Theyll be worth every penny.

My apologies in advance to the M&A professionals, corporate finance attorneys, and business brokers who consider this book an over-simplification of a complex process. My goal is not to dumb down your work, but simply to focus on the important bits that owners need to know and to package those bits in a format that (hopefully) doesnt read too much like a textbook. At times, Im sure I will frustrate you by glossing over critical details and technicalities. I tried to illustrate both the forest and the trees, but no doubt missed in places.

Before you start reading, please download The Art of Selling Your Business Workbook (its free). I designed the workbook with exercises from each chapter, so you can apply what you are learning to your business. Youll also get some other goodies, such as a free chapter of Built to Sell and a new episode of Built to Sell Radio each week. Just pop your email address into the form at BuiltToSell.com.

SECTION 1: THINGS TO CONSIDER BEFORE YOU START

SECTION 3: PUNCHING ABOVE YOUR WEIGHT IN A NEGOTIATION

Think of selling your business as a long, tough journey into the back-country. You will encounter plenty of obstacles, but if you pack right, youll be fine. Consider this section an essential list of things you need to arrange before starting your trek.

AN INTRODUCTION TO THE ART OF SELLING

Im not much of an artist, but if you gave me a can of white paint, I could probably make a close replica.

Its called Bridge, but its just a square white canvas, painted all white. It was created by the late Robert Ryman, who was apparently a big deal in the contemporary art world. He was known for something called minimalism, which became a thing in the 1960s.

To me, it just looks like a white ceiling tile that was removed from a high school cafeteria. Thats why I find it so shocking that someone would pay $20.6 million for Bridge at a Christies auction.

But heres the thing: I know nothing about art. If I werent such a Neanderthal, I might appreciate the value of an original canvas from one of the 20th centurys most prolific artists.

But I dont.

And thats okay because someone doesin fact, a lot of people do.

One persons ceiling tile is another persons masterpiece. Similarly, your business can be worth different amounts depending on whom youre asking. Sure, you can probably look up a standard industry benchmark for valuing your company, but you can also look up the cost of a white ceiling tile.

Theres an art to selling a business well. It comes down to how you package it, the story you tell about it, and the feeling it gives potential buyers when they imagine owning it. As youll see in chapter 16, its how Gary Miller got IBM to almost quadruple its acquisition offer for Aragon Consulting Group from three times earnings before interest, taxes, depreciation, and amortization (EBITDA) to almost 11 times. Its the same reason Stephanie Breedlove sold her $9 million payroll company for $54 million (also covered in chapter 16).

There is a systematic way to calculate the value of your companybut if youre all head and no heart, you will miss the point.

The Art of Selling Your Business is designed to be your playbook for navigating both the hard rules and the softer edges of selling well. It features a set of instructions to follow at each step of the process and describes the professionals youll need to lean on to get a deal done.

Ive started and exited a few small businesses, and Ive tried to describe what I have learned about making them valuable in a book I wrote called Built to Sell: Creating a Business That Can Thrive Without You, which was published in 2011. In 2015, I wrote a companion book called The Automatic Customer: Creating a Subscription Business in Any Industry, which illustrates how to create a recurring revenue modelone of the value drivers I covered in Built to Sell.